Undercollateralized credit is a transformative force in DeFi, echoing historical “wildcat banks” that once issued currency without stringent reserves. Today, on-chain credit recaptures that spirit of free-market lending while aiming for transparency and reliability through smart contracts and legal frameworks. By letting trusted borrowers unlock capital without tying up large amounts of collateral, undercollateralized lending brings an efficiency boost to decentralized markets and institutional players alike. This talk explores the evolution of credit from 19th-century wildcat banking to modern DeFi protocols such as MakerDAO or Aave—where we still see mostly overcollateralized practices. We’ll examine why undercollateralized lending is essential for real-world financing, institutional adoption, and more dynamic economic activity on-chain. We’ll also consider the associated risks: from reputation-based arrangements to regulatory compliance, reflecting on how robust agreements and off-chain data can mitigate concerns. Walk away with a deeper appreciation of how a centuries-old concept is being reimagined on digital rails, empowering enterprises and DAOs to seize new capital opportunities in ways that fuse tradition and innovation.